On May 26, 2011, the U.S. Supreme Court upheld Arizona’s 2007 immigration law that requires all employers to use E-Verify for all new hires and permits the revocation of a company’s business license as a penalty for employing unauthorized workers. This decision resulted from a challenge to the Legal Arizona Workers Act of 2007, not to be confused with the 2010 controversial Arizona “Support Our Law Enforcement and Safe Neighborhoods Act.”

The Legal Arizona Workers Act

In July 2007, Arizona enacted the Legal Arizona Workers Act, which prohibits Arizona employers from knowingly or intentionally employing individuals unauthorized to work in the U.S. Under the Act, any person may submit a complaint alleging that an employer employs unauthorized workers. Once the complaint is investigated and determined not to be false, the state will initiate legal action against the employer. During the court proceeding, the state is limited to the federal government’s determination of the employee’s lawful status. If the employer is found to have knowingly or intentionally hired a person unauthorized to work in the U.S., the Act permits the court to impose various penalties including the suspension of its license to operate a business in the state of Arizona. The Act defines a license to include any agency permit, certificate, approval, registration, charter, or similar form of authorization, foundational documents, articles of incorporation, and certificates of partnership.

Congress passed IRCA to regulate the employment of unauthorized workers in the U.S. and requires employers to complete and retain a Form I-9 for each employee. During the I-9 form process, an employer must review original documentation to determine the identity and employment eligibility for all new hires. IRCA provides for civil and criminal penalties for employers who violate the requirements. IRCA preempts any state or local law imposing civil or criminal sanctions other than through licensing and similar laws. Therefore, IRCA was designed to provide the exclusive remedy for employing unauthorized workers, but carves out the option for states to impose sanctions regarding licensing and similar laws. The lower court held that IRCA did not expressly preempt the Act, because the Act falls within the exception allowing states to implement licensing laws. The lower court also held that the Act’s provision mandating the use of E-Verify was not inconsistent with federal policy, and thus was not impliedly preempted. The business organizations appealed the federal district court’s ruling to the 9th Circuit Court of Appeals. The 9th Circuit upheld the lower court’s ruling and the case was subsequently appealed to the U.S. Supreme Court. On May 26, 2011, the U.S. Supreme Court upheld Arizona’s 2007 immigration law that requires all employers to use E-Verify for all new hires and permits the revocation of a company’s business license as a penalty for employing unauthorized workers. This decision resulted from a challenge to the Legal Arizona Workers Act of 2007, not to be confused with the 2010 controversial Arizona “Support Our Law Enforcement and Safe Neighborhoods Act.” The Legal Arizona Workers Act In July 2007, Arizona enacted the Legal Arizona Workers Act, which prohibits Arizona employers from knowingly or intentionally employing individuals unauthorized to work in the U.S. Under the Act, any person may submit a complaint alleging that an employer employs unauthorized workers. Once the complaint is investigated and determined not to be false, the state will initiate legal action against the employer. During the court proceeding, the state is limited to the federal government’s determination of the employee’s lawful status. If the employer is found to have knowingly or intentionally hired a person unauthorized to work in the U.S., the Act permits the court to impose various penalties including the suspension of its license to operate a business in the state of Arizona. The Act defines a license to include any agency permit, certificate, approval, registration, charter, or similar form of authorization, foundational documents, articles of incorporation, and certificates of partnership. The Act also requires all employers in Arizona to use the federal E-Verify system to verify the employment eligibility for all new hires. Interestingly the Act does not provide any penalties for failing to use E-Verify but it does provide a safe-harbor. Legal Challenge After the Act was passed in 2007, a group of business organizations, including the U.S. Chamber of Commerce, filed a complaint in Federal Court challenging the Act on the grounds that the Act was expressly preempted by federal law, specifically the Immigration Reform and Control Act of 1986 (“IRCA”). The challengers alleged that the penalty of revocation of an employer’s business license was expressly preempted and the provision requiring the use of E-Verify was impliedly preempted by IRCA. LEGAL ALERT Fisher & Phillips LLP attorneys at law Solutions at Work® May 26th 2011 www. l a b o r l a w y e r s . c o m Atlanta • Charlotte • Chicago • Cleveland • Columbia • Dallas • Denver • Fort Lauderdale • Houston • Irvine Kansas City • Las Vegas • Los Angeles • Louisville • New England • New Jersey • New Orleans • Orlando Philadelphia • Phoenix • Portland • San Diego • San Francisco • Tampa • Washington, DC U.S. Supreme Court Upholds Arizona’s E-Verify Law and Penalty Provisions for Employing Unauthorized WorkersU.S. Supreme Court Decision – Chamber of Commerce of the U.S. vs. Whiting In a 5-3 decision, the Supreme Court upheld the 9th Circuit decision that federal law does not preempt the Legal Arizona Workers Act. The Court held that “Arizona’s licensing law falls within the confines of the authority Congress chose to leave to the States and therefore is not expressly preempted.” The Court also determined that federal law does not impliedly preempt the mandatory use of E-Verify requirement. The Court reasoned that although Congress had made the program voluntary at the national level it had expressed no intent to prevent states from mandating participation. Implications for Employers Arizona employers should ensure that they are in compliance with the Legal Arizona Workers Act including the use of the E-Verify system to confirm the employment eligibility for all new hires. Arizona employers in violation of this law will face serious penalties. If found to have violated the provision regarding knowingly employing an unauthorized worker, the employer will be ordered to terminate the employment of all unauthorized workers and file quarterly reports on all new hires for a probationary period of three years. For an initial violation of the Act, the employer may also have its business license suspended for a period not to exceed 10 business days. A second knowing violation will result in the permanent revocation of the employer’s business license for the location where the unauthorized worker performed work. For the first intentional violation, the employer will be required to terminate all unauthorized workers, file quarterly reports on all new hires www. l a b o r l a w y e r s . c o m Atlanta • Charlotte • Chicago • Cleveland • Columbia • Dallas • Denver • Fort Lauderdale • Houston • Irvine Kansas City • Las Vegas • Los Angeles • Louisville • New England • New Jersey • New Orleans • Orlando Philadelphia • Phoenix • Portland • San Diego • San Francisco • Tampa • Washington, DC for a probationary period of five years, and have its business license suspended for a minimum of 10 days. A second intentional violation requires the permanent revocation of all business licenses. For knowing and intentional violations, it is considered a second violation if it occurs at the same business location as the first violation, during the employer’s probationary period. In light of these potential sanctions, Arizona employers can take steps to avoid or reduce the risk of enforcement action. • First, ensure you are enrolled and participating in E-Verify and are in compliance with the requirement for use of the system. • Second, implement or re-issue policies confirming your compliance with U.S. immigration laws and the Legal Arizona Workers Act. • Third, take the time to make certain your I-9 forms are properly completed. This case has implications for employers outside of Arizona. Already, states are adopting similar legislation and we expect to see an increase in the number of states that mandate the use of E-Verify. Employers, especially those operating in multiple states, should ensure they are familiar with and complying with state specific immigration laws. For more information, please contact a member of our Global Immigration Group. U.S. Supreme Court Upholds Arizona’s E-Verify Law and Penalty Provisions for Employing Unauthorized Workers This Supreme Court Alert presents an overview of a particular decision. It is not intended to be, and should not be construed as, legal advice for any specific fact situation.

Latest Posts

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

"My best business intelligence, in one easy email…"

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Privacy Policy (Updated: October 8, 2015):

hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.